Carmichael v. Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund of Chicago

Plaintiffs, participants in public pension funds, sued, challenging the constitutionality of three reforms in Public Act 97-651, which altered articles 8, 11, and 17 of the Illinois Pension Code (40 ILCS 5/8, 11, 17) and modified the calculation of annuities. The circuit court invalidated two provisions eliminating the right to earn union service credit for leaves of absence beginning after the amendments' effective date as violating the Illinois Constitution's (Ill. Const. 1970, art. XIII, 5) pension-protection clause but upheld the constitutionality of the third reform. The Illinois Supreme court affirmed regarding the elimination of the right to earn service credit for a union leave of absence; for participants who were already members on the Act's effective date, the ability to earn service credit on leave of absence for labor organization employment is a "benefit" that "cannot be diminished or impaired." The court reversed the dismissal of a claim that the change in the law to deny the use of a union salary under section 8-226(c) or 11-215(c)(3) to calculate the “highest average annual salary” violate the pension clause. The court also reversed the rulings on the that resulted from the circuit court’s construction of section 8-226(c)(3) to include defined contribution plans within the definition of “any pension plan.” View "Carmichael v. Laborers' & Retirement Board Employees' Annuity & Benefit Fund of Chicago" on Justia Law